Vacant Residential Properties — Question

– in the House of Lords at 11:22 am on 12 February 2015.

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Photo of Lord Dubs Lord Dubs Labour 11:22, 12 February 2015

To ask Her Majesty’s Government what further steps they are taking to reduce the number of residential properties left vacant by their owners.

Photo of Lord Ahmad of Wimbledon Lord Ahmad of Wimbledon Parliamentary Under-Secretary (Department for Communities and Local Government)

My Lords, this Government have provided the tools and incentives to tackle empty properties. The number of homes empty for more than six months is now at a record low. This Government have achieved a year-on-year reduction in long-term empty homes through incentives such as the new homes bonus, changes to council tax and by providing over £200 million of empty homes programme funding.

Photo of Lord Dubs Lord Dubs Labour

My Lords, I thank the Minister for the Answer but, frankly, it is not good enough. There is still widespread anger at the number of empty properties in this country, especially in London, where developers build luxury properties and market them abroad to people who simply use them as an investment and not for housing. Surely what we need is more power for local authorities to impose swingeing rates of council tax on properties left empty for a long time and to make sure that those local authorities use it.

Photo of Lord Ahmad of Wimbledon Lord Ahmad of Wimbledon Parliamentary Under-Secretary (Department for Communities and Local Government)

The Government have taken stringent action. The noble Lord talks about London. In Wandsworth, for example, we have seen the number of empty homes come down from 85,000 in 2009 to 59,000 in 2013. In addition, we have provided over £3.4 billion to local authorities, in recognition of delivery of over 700,000 new homes, of which 100,000 have been empty homes. He talks of council tax. Councils can also now charge—and we have empowered them to do so—up to 150% council tax for homes empty for more than two years.

Photo of Lord Spicer Lord Spicer Conservative

My Lords, when I was Minister for Housing, there were 1 million empty properties, half of which were in the public sector and half in the private sector. Is that roughly the proportion now?

Photo of Lord Ahmad of Wimbledon Lord Ahmad of Wimbledon Parliamentary Under-Secretary (Department for Communities and Local Government)

We have been working very closely with local authorities and the private sector. In doing so, in the public sector we have ensured that incentives provided to local authorities do determine that, but increasingly we are finding the balance is towards the private rented sector. That balance can fluctuate. We have new figures on empty homes coming out later, in which we will assess exactly how home one-for-one replacement works. However, there is a proportion to be struck between the private rented sector and the local authority sector. The main headline is that we are seeing record reductions in the number of empty homes.

Photo of Lord Hunt of Kings Heath Lord Hunt of Kings Heath Shadow Spokesperson (Health), Shadow Deputy Leader of the House of Lords

My Lords, following that last question, is the Minister aware that the NHS property agency—a government agency—holds many homes in its portfolio? Could he confirm that and say what they are doing to make those homes available in one way or another for people to let or buy?

Photo of Lord Phillips of Sudbury Lord Phillips of Sudbury Liberal Democrat

Would my noble friend concur with the widely held belief that a high proportion of the foreign purchasers of very expensive London properties are crooks and that they are using the safety of this country in a very cynical way? Has any investigation been made of that? If so, is any action in the pipeline to prevent it?

Photo of Lord Ahmad of Wimbledon Lord Ahmad of Wimbledon Parliamentary Under-Secretary (Department for Communities and Local Government)

I cannot agree with my noble friend. London is an incredible place and we want to attract investment. What the Government should be doing—and are doing—is ensuring that we tackle tax avoidance. For example, we have raised the threshold of capital gains tax for people who own properties but are not resident in the UK. That is the way to strike the right balance to ensure that London is a magnet and rightly holds its position as a leading city on the world stage.

Photo of Lord Clark of Windermere Lord Clark of Windermere Labour

My Lords, does the Minister appreciate that there is another aspect of empty housing—that is, holiday cottages? In our national parks especially, we have a situation where holiday cottages stand empty for a number of months a year. There is not a large enough resident population, so things such as doctors’ surgeries are now under pressure because there are insufficient permanent residents. Would the Minister be prepared to meet the local authorities in national parks and discuss the possibility of allowing them to register and, on occasions, restrict the number of rented properties?

Photo of Lord Marlesford Lord Marlesford Conservative

My Lords, does the Minister not realise that what people would really object to would be a lot of ordinary houses that people needed being empty? That would be a very bad thing. But when these very big, grand houses held by foreigners are empty, what people really mind is that they are not making a proper contribution through the council tax system. A £20 million penthouse pays only three times what the humblest dwelling pays. Does he recognise that my Private Member’s Bill to reform that so that it becomes 42 times that would be a much better solution to the present situation, which is untenable and unsustainable, and certainly much better than the mansion tax, which is unworkable?

Photo of Lord Ahmad of Wimbledon Lord Ahmad of Wimbledon Parliamentary Under-Secretary (Department for Communities and Local Government)

I agree with the final point that my noble friend makes. As I have said to him previously and in letters, the Government have no plans to look at council tax revaluation.

Photo of The Bishop of Rochester The Bishop of Rochester Bishop

My Lords, the contributions already made have underlined the importance of this and the potential for tackling some of the issues in the housing market and the lack of housing. While this may be a relatively small part of that, is the Minister aware of schemes such as the Houses into Homes initiative in Wales, which uses recyclable loans mainly to private individuals and has managed to return some 2,000 empty homes to use since 2012? Do the Government have further plans to encourage such initiatives, particularly those that are at a local level and involve private individuals and the voluntary sector?

Photo of Lord Ahmad of Wimbledon Lord Ahmad of Wimbledon Parliamentary Under-Secretary (Department for Communities and Local Government)

The right reverend Prelate highlights a key area. As I alluded in my original Answer, we have made £200 million available to support innovative schemes run by community groups, councils and housing associations, such as the one he mentioned. Even in my own patch, we have St Mungo’s Broadway, which receives £372,000 from the empty homes community fund and has now bought back 14 empty homes in the local area. The Government are keen to see how we can encourage such innovative schemes at a local level.

Photo of Baroness Hollis of Heigham Baroness Hollis of Heigham Labour

My Lords, I think that the entire House knows that we have a housing crisis in that young people cannot afford to buy, there is not enough social housing to rent and the private rented sector is now so expensive that it is fast driving up housing benefit bills, which are paid by the rest of us. Is the noble Lord willing to ask his department to reconsider the decision made by the DCLG to release builders from the requirement, on small sites, to provide housing for social rent as part of their Section 106 planning obligations? Unless that change is removed, I can promise the noble Lord that very little affordable housing will be built in rural areas.

Photo of Lord Ahmad of Wimbledon Lord Ahmad of Wimbledon Parliamentary Under-Secretary (Department for Communities and Local Government)

The noble Baroness raises a specific issue on planning. It is important that such changes are reflected at a local level and that local development plans reflect affordable housing provision. Under the right-to-buy scheme, for example, 30,000 people have come into house ownership since 2012. Under that scheme, every council home will be replaced by a new affordable home on a one-to-one basis. Of the 167 councils with such stock, 165 have already signed up to the one-to-one replacement scheme.